Barclays is working with a startup to explore how it could use
the technology underpinning bitcoin in everyday banking.

Finextra
reports that the bank has signed a deal with Safello, a
Swedish company that was on its fintech accelerator programme in
London, to explore how the blockchain could be used in
traditional finance.

Finextra says the deal involves Safello, which operates an online
exchange for bitcoin, working with Barclays on "proof of
concepts" — testing traditional banking processes on the
blockchain to prove they work.

The blockchain is the software that underpins bitcoin. It powers
transactions and automatically keeps a decentralised record of
them — recording who paid who and how much. This stops coins
being spent more than once and allows the currency to function
without a central regulating authority.

Banks are interested in the blockchain for several reasons but
the main two are speed and cost. Banks operate on old legacy
systems that mean things like sending money internationally is
slow and costly. The blockchain, built from scratch, doesn't have
many of the same issues.

But despite the interest from traditional financial operators,
most think the blockchain won't be adopted anytime soon. Because
of regulatory and scale issues, it can take banks years to adopt
new technology, let alone cutting edge software.